The connection between a company’s environmental performance (CEP) and financial performance (CFP) is a complex and debated topic in economics and management. Researchers continue to question whether focusing on environmental sustainability is beneficial financially or if it leads to financial losses. Despite 25 years of research, there is no clear agreement on how environmental management impacts financial performance. Studies yield mixed results, with some suggesting a positive relationship, others indicating a negative one, and many showing no significant correlation at all. In the environmental pillar domain, some specific investment themes are of particular relevance: Emission and Green Innovation. Climate change, driven by greenhouse gas emissions, is recognized as the key cause of future economic and social issues, significantly affecting businesses. In response to climate change, many policies are being implemented to promote low-carbon processes and standards, increasing pressure on businesses, especially in carbon-heavy industries, to manage their emissions. As a result, investments in clean energy have surged, making it one of the fastest-growing areas in global energy. Research has explored the link between carbon emissions and financial performance, viewing emissions as a risk factor for which investors seek compensation reflected in stock returns. Despite existing studies, findings on carbon emissions’ impacts on financial performance remain mixed, it is therefore of particular interest analyzing the outcomes from the empirical part of the chapter. Similarly, the need for Green Process Innovation emerges from rising global populations, economies, and environmental concerns. Research illustrates that Green Innovation can provide both financial and environmental benefits while some reviews indicated that companies struggling with eco-innovation face additional costs and delays in seeing positive results. The relationship between environmental performance and financial performance is examined using both a Recursive Portfolio Approach, where stocks are categorized by environmental scores to assess their financial returns and multivariate regressions.